March canola is up $9.10 per metric ton (mt), March soybean oil is up 1.18 cents/pound, May European rapeseed is up 2.25 euros per mt and February Malaysian palm oil is up .49%. March oats are up 1/4 cent per bushel. February crude oil is up $.08 per barrel, February ULSD is up $.0104 per gallon, and the March Canadian dollar is up .00195 at .72285. The March U.S. Dollar Index is down .315 at 98.575 and the February Brazilian real is up .00005 at 0.18550.

Soybean oil is leading the charge going into the USDA reports with strong gains possibly tied to factors discussed in Friday's post found at https://www.dtnpf.com/…. Lower production due to a low oil yield at a time when export estimates likely need to be raised could be inspiring a short covering rally ahead of the report. Especially considering managed money traders had their largest net short position seen since Aug. 26, 2024, as of the Dec. 6 cutoff (at 66,568 contracts net short).

That has helped canola add to gains with short covering by funds, likely a feature there as well. As of Dec. 6, managed money traders were net short 96,131 contracts or 1.923 mmt, their largest short position since Dec. 9, 2024. Quite a statement considering all the trade tensions and related volatility seen in 2025. It would make sense that some of those shorts would be covered ahead of PM Carney's trip to China.

The remainder of the grain and oilseed complex is higher ahead of the report, with the exception of soybean meal (which is lower due to spreading against soybean oil). A weaker U.S. dollar and surging precious metal markets likely provide spillover psychological support. Energy markets that are near their highs of the day are adding to the bullish commodity story.

The remaining outside markets are very subdued, considering the events of the past few days, with treasuries only quietly lower now while equities have recovered, turning mixed on the day despite concerns over pressure on the Federal Reserve. The U.S. dollar remains under pressure, but not extremely so, considering the potential for lower interest rates to come.

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